CANTON, Ohio -- The Timken Co. has reported sales of $1.3 billion in the second quarter of 2011, an increase of 31 percent over the same period a year ago. The increase primarily reflects growing demand in the company’s broad industrial markets, as well as favorable effects from pricing, material surcharges and currency.

The company's second quarter income from continuing operations increased 49 percent to $121.5 million, or $1.22 per diluted share, net of non-controlling interest, compared with $81.4 million, or 84 cents per diluted share a year ago. Improved demand, mix, surcharges and pricing more than offset higher raw material and logistics costs, as well as increased selling and administrative costs.

"Timken's strategy is working. We're benefitting from an enhanced portfolio, executing well and have positioned the company to capitalize on attractive global markets," said James Griffith, Timken president and CEO. "We are on pace to achieve record sales and earnings for the full year."

Timken posted sales of $2.6 billion in the first half of 2011, up 34 percent from the same period in 2010. Stronger demand across the company's industrial sectors drove the increase, along with favorable pricing, surcharges and currency effects.

The company's earnings from continuing operations increased 113 percent to $234.2 million, or $2.36 per diluted share, net of non-controlling interest. That compares with $109.7 million, or $1.13 per diluted share, earned in the same period last year. The first-half of 2011 earnings benefited from increased demand, higher surcharges and a combination of favorable pricing and mix, which more than offset higher raw material and logistics costs, as well as selling and administrative costs.

Timken now expects a full-year sales increase of 25 to 30 percent in 2011 over 2010. The revised outlook reflects the company's second-quarter performance and stronger-than-expected demand in its Steel and Process Industries segments, as well as the benefit expected from the Philadelphia Gear acquisition for the remainder of the year.

The company is raising its 2011 full-year earnings estimate to a range of $4.30 to $4.50 per diluted share from its prior estimate of $3.80 to $4.10 per diluted share. The increase reflects the company’s record first-half results and improved outlook. The company expects cash from operating activities to be approximately $275 million, and a free cash flow use of approximately $10 million after capital expenditures of roughly $210 million and dividends of approximately $75 million. Excluding discretionary pension and VEBA trust contributions of $193 million, net of tax, made in the first half of 2011, free cash flow is expected to be approximately $180 million.